Wall Street Analyst Praises DIRECTV's HD Lineup
Craig Moffett says it's a major reason why he's upgrading the company's stock.
By Swanni
Sanford C. Bernstein's Craig Moffett apparently believes the answer is clear.
The influential Wall Street analyst today upgraded his stock rating on DIRECTV from Underperform to Market Perform -- and the satcaster's recently expanded high-def lineup is a key reason.
“DIRECTV’s strong HDTV offering positions the company for solid growth, and this faster growth is unmistakably value accretive,” Moffett said today in a note to investors.
DIRECTV, the nation's largest satellite TV service, recently expanded its national HD lineup from nine to more than 80 channels.
While some analysts have soured on cable and satellite stocks (such as EchoStar) due to increasing competition in the category, Moffett says DIRECTV is well positioned to boost subscribers and increase revenues.
“With the recent drop in DIRECTV's shares, lower (set-top) costs, and with recent improvements in churn rate, DIRECTV's current valuation now looks approximately neutral," he said.
Moffett added that DIRECTV's high-def lineup will generate more high-end customers, which should help it succeed even if the economy falters.
EchoStar, the nation's second largest satcaster, has seen its stock decline in recent weeks, with the exception of a two-day period last week when rumors surfaced that AT&T may be interested in buying the company.
Moffett, who rates EchoStar's stock as Underperform, today raised his price target on DIRECTV from $19 a share to $26.
Despite the analyst's comments, DIRECTV's stock fell more than three percent today, finishing at 23.41.
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